The U.S., Japan and China

September 13, 2005

HIS POLITICAL party has held power for all but 10 months over the last 50 years. He already is Japan's longest serving prime minister in two decades. And Junichiro Koizumi's ruling Liberal Democratic Party just won its largest mandate since 1986 and, in league with a smaller party, will hold a veto-proof share of the Japanese Parliament's lower house.

But now Prime Minister Koizumi has his work cut out for him - work at home and abroad that could have a tremendous impact on the United States.

The sole focus of the 12-day campaign leading up to the landslide electoral victory will now be the first order of business: reforming the world's second-largest (but moribund) economy - starting with Mr. Koizumi's plan to privatize the nation's postal system, also a bank for $3 trillion in Japanese citizens' savings that often have been devoted to pork-barrel public projects instead of more productive investments. This step toward a healthier, more dynamic Japanese economy should be good news for U.S. exporters and for Washington, which has been nudging Tokyo toward giving up its pacifist constitution and sharing more of the U.S. defense burden in Asia.

Less prominent during Mr. Koizumi's campaign but no less important has been the task of improving Japanese relations with China and the rest of Asia. Increasingly, Tokyo and Beijing nationalists have been at each other's throats, with China mostly getting the best of it. At stake are conflicting claims over energy reserves in the Sea of Japan and, more broadly, regional dominance. Ultimately - with the United States so closely allied with Japan and receiving Japanese defense backing from Iraq to Taiwan - this is very much a U.S. struggle as well.

With that in mind, Mr. Koizumi's continued commitment to making annual pilgrimages to the Yasukuni Shrine - to honor Japan's war dead, including World War II criminals - must be dropped. Just like Washington, Tokyo has plenty of potential for conflict with Beijing without inflammatory distractions that are no substitute for meeting the challenge of how to substantively cope with China's rise.

It is sadly ironic that such tensions have been growing as the world early this month marked the 60th anniversary of Japan's surrender in the Pacific war, a conflict that can be traced back to Japan's quest for control over its sea lanes - roughly where Tokyo and Beijing now are at odds. Major missteps by Japan would inevitably draw the United States closer to conflict there once again. Washington thus needs Mr. Koizumi to look far beyond Japan's postal system.